LEGISLATION to outlaw squatters is being proposed by Home Office ministers.

While criminalising the country's estimated 60,000 squatters has long been on the Government's agenda, Home Office sources suggest it has become one of the first items Michael Howard - the new Home Secretary - is considering for a planned Criminal Justice Bill. Although details have yet to be decided, Mr Howard has been presented with one option which could include prison as a penalty.

Present law allows owners to call the police only if they have been prevented from entering their normal residence, or if there has been violence or damage used to gain entry. Otherwise squatting in vacant properties remains a civil offence.

But bringing a county court action can take time and can cost hundreds of pounds, which property owners are unlikely to recover from squatters.

John Major has recently repeated the Tory Party manifesto pledge to tackle squatting. However, some ministers are said to be worried about the effects such legislation could have on the country's already embarrassing homelessness problem and the costs to the criminal justice system of enforcing the legislation.

A recent survey suggested that one- third of squatters were families, which may qualify for council housing. However, the rest were single with no hope of public sector housing and could end up on the streets.

Details of civil actions show that 90 per cent of squatting is in unoccupied public sector housing and 9 per cent in commercial property - leaving only a small number of individuals affected. Some local authorities, concerned that squatters are effectively jumping housing waiting lists, have introduced emergency lines for people to report anyone entering unoccupied council properties.

John McCafferty, leader of Hackney Borough Council, which has such a scheme, said: 'I can't see much use in criminalising thousands of young people - and it is mostly young people. It would be a much better use of money to build and provide more homes.' He believed current legislation was adequate if the court proceedings for possession were speeded up and more funds were made available for speedy renovations for unoccupied council properties.

His views were shared by housing charities and pressure groups for the homeless, who feared criminalising squatters would swell the numbers sleeping on the streets.

Gerald Oppenheim, secretary of the Single Homeless in London working party, said: 'It is a difficult problem. But for many people squatting has been a means of getting a roof over their heads - however inadequate. Locking them up seems a ludicrous way of solving the housing crisis.'

Sheila McKechnie, director of Shelter, the national campaign for the homeless, said proposals to criminalise squatting were totally disproportionate to the problem. Instead, the Government should focus on bringing empty properties back into use.

Tim Dwelly, editor of Roof, the housing magazine, remained sceptical about whether the Home Office plans would reach fruition. 'It would involve a huge increase in cost to the Government - in policing, courts, putting people in prison. It is simply not cost-effective.'

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